Learning How to Give Away Money

by Amanda Hsiung

As a relative newcomer to global grantmaking, I was thrilled to have the opportunity to attend the Global Grantmaking Institute this week to strengthen my understanding of the field. Attending the institute has not only provided me with useful background knowledge, however. It's also given me the opportunity to reflect on the nature of global grantmaking as a profession and why I believe this work is so important.

At its core, grantmaking is defined as the practice of giving away money. This seems so simple. Why would anyone need to spend two days learning how to give away money? However, during these two days at the institute and my three months at the Global Fund for Children (GFC), I have learned that there are myriad approaches to giving away money and that the practices a grantmaking institution implements can have significant effects on the organizations it supports and the community in which it works.

For example, when visiting potential grantees, I have witnessed firsthand how lack of funding for general operating support and rigidly restricted programmatic grants have forced many NGOs to fit their work into a narrow project-based mold. As organizations that are reliant on short-term project funding struggle to finance their work once the project ends, a lack of general operating support decreases continuity and causes service disruptions for vulnerable beneficiaries. This can also stifle innovation and local leadership as NGOs implement projects that have proven attractive to foreign donors instead of developing new models. In contrast, long-term general support to innovative NGOs can promote effective implementation by allowing organizations to set their own strategies and invest in overall organizational capacity.

At GFC, our funding relationships with donors tend to last between 3-6 years to give our grantees the chance to grow and develop to a level where they can graduate from our funding to sustainability. A great example of this is our grantee partner Ba Futuru in Timor-Leste. Since 2004, the organization has worked to build a culture of peace, engaging children and youth in artistic conflict resolution and human rights activities to change accepted norms about violence. Through six years of GFC funding, Ba Futuru's annual expenditures have grown from under $20,000 to over $200,000, and the organization won the prestigious STARS Foundation Rising Star Award. 

As a global grantmaker, I believe that supporting local organizations is the best way to contribute to solving the world's toughest social problems. To support these organizations as effectively as possible, it is important to reflect on examples of how our funding strategies impact their work.Yes, as grantmakers, we have to learn how to give away money.

Amanda Hsiung is associate program officer for East and Southeast Asia at the Global Fund for Children.